BMW recently began leasing the electric MINI to consumers in select areas of the US. The program entailed an application period of nearly 8 months and a detailed selection process that lands the electric car in the hands of a few select individuals. At nearly $850 a month, it's far from cheap. But the program is only considered a trial because the cars will be returned to BMW at the end of one year for evaluation.

With the MINI E in the publics hands all is well, right? Not so says plug-in advocacy group Plug in America. They feel BMW may be exploiting a loophole in California's CARB program requiring automakers to produce zero emission vehicles. According to the group, BMW has designed the leasing program to allow them the receive maximum credit for the minimum amount of effort.

BMW will receive certain exemptions, grants, etc... for putting the MINI E in the public space, but the vehicle is not even considered a production ready product. It is called a prototype by the company and does not have widespread distribution or sales volume.

Further compounding the issue, MINI sent several vehicles to municipal services at the low lease rate of only $10 a month. According to Plug in America BMW began, "dumping dozens of cars into municipal fleets to be leased for only $10 a month, most recently pulling some of those vehicles from retail consumers who had been willing to pay full price and complied with the nearly 8-month process required to get one of the cars."

BMW receives Zero Emission Vehicle credits for the one year lease program of the prototype vehicle. In fact, the receive just as many credits as they would if the vehicle was actually a true production product. According to Plug in America, the lease-only paradigm is exactly what crushed the EV back in late 90s. Back then, automakers rushed EV leases to market, but the boom quickly turned to a bust and we certainly don't want the same result again. PIA wants BMW and all other automakers to only receive credits for vehicles that are offered for retail sales.

CARB has announced that they will look into the loophole next year and as they said, "we've urged BMW to consider extending that one-year lease."

We feel sorry for those that waited 8-months to see their Mini E go at discounted rates to fleets, but automakers typically will look to capture all incentives possible and can't really be blamed for exploiting an existing loophole. Legislation needs to catch up to assure success of EVs and to force manufacturers to offer true production EVs for sale to the public.

Plug In America is urging Mary Nichols, chief of California's air board, to close a gaping loophole that could deal a blow to the proliferation of plug-in vehicles just as the federal government is awarding billions of dollars to automakers large and small to advance battery technology.

The California Air Resources Board's Zero Emission Vehicle (ZEV) program has no minimum timeframe for vehicles used for compliance. Therefore, BMW's one-year pilot program consisting of just 500 converted electric Mini Coopers leased at an astonishing $850 per month will earn the same full credit as a standard vehicle production program.

"CARB is allowing BMW to game the system by accruing the maximum number of ZEV credits with the least amount of effort," says Plug In America legislative director Jay Friedland. Previous lease-only programs led to the crushing by automakers of thousands of vehicles in the 1990s, Friedland notes.

"We encourage pilot programs, which get cars on the road and enable valuable early feedback, but in order to receive full credit, these vehicles must be offered for sale," he says.

The ZEV program loophole, which Plug In America denounced before a critical 2008 air board vote, extends through 2011. "CARB had plenty of time to see this coming," Friedland says. "BMW is not the first automaker to take advantage of the loophole, but it should be the last. Consumers should have full access to the fuel efficient cars they are demanding."

Adds Plug In America advisory board member Chelsea Sexton: "This is turning out to be a half-baked, poorly executed program by BMW, who is acting solely for the sake of regulatory compliance. Shame on CARB for allowing it."

BMW's poor planning has caused a host of problems. The first Mini Es were delivered in late May, some six months after BMW's stated delivery date. This delay caused a large percentage of people to drop out of the program. Furthermore, BMW did not have enough proper charging cables manufactured, leaving up to 300 lessees with a minimum 23-hour recharging time. As a result, many drivers are not able to use the vehicle daily.

Meanwhile, in order to meet today's(6/30) deadline for maximum CARB credit, BMW has been dumping dozens of cars into municipal fleets to be leased for only $10 a month, most recently pulling some of those vehicles from retail consumers who had been willing to pay full price and complied with the nearly 8-month process required to get one of the cars.

"We're concerned that this situation won't be seen for what it is-a botched BMW program," Sexton says. "Instead, plug-in vehicles will be perceived as too expensive, problematic and not ready for prime time. BMW's mistakes reflect badly on other car companies, on the technology itself and on the plug-in vehicle movement."

Santa Monica resident Jeff U'Ren is one customer who was dropped from the program, without explanation, the night before he was to take delivery of his Mini E.

"I longed to drive a high performance EV again," says U'Ren, a former GM EV1 driver. "Just having that car on the road is such an important tool to show that EV technology is viable. People continue to think it's way too expensive and impractical."

In contrast to BMW's lease plan, Nissan has announced a late 2010 delivery of 5,000 all-electric vehicles designed from the ground up and offered for sale for between $25,000 and $33,000, before federal tax credits. The Japanese auto company, recently awarded a $1.6-billion loan from the U.S. Dept. of Energy to build a battery plant and modify its existing Tennessee facilities, has also announced that it will deliver hundreds of thousands of electric vehicles in 2012.

The Dept. of Energy also awarded $465-million and $5.9-billion loans to Tesla Motors and Ford, respectively, to make electric and other fuel efficient vehicles.

About Plug In America: Plug In America is leading the nation's plug-in vehicle movement. The nonprofit organization works to accelerate the shift to plug-in vehicles powered by clean, affordable, domestic electricity to reduce our nation's dependence on petroleum and improve the global environment. For more information: http://www.pluginamerica.org.

Not unlike GM and others' shameless gaming of the "flex fuel" loophole. They got CAFE credits for thousands of "flex-fuel" Tahoes, et al, sold in areas where alt fuel wasn't even available. Make a rule and they will game it.